With a US housing recovery in full swing, this may be a good time for investors to consider securities backed by residential real estate. We think they’re an attractive way to diversify exposure to high-yield bonds and other risk-seeking assets.
Pension fund managers, like many investors, have historically paid a premium for liquidity. Lately they’ve started to realize that liquidity can be an illusion—but it can also be an opportunity.
We don’t usually think of rising rates as being good for homeowners. That may be because we’re accustomed to thinking of financing (and refinancing) as the key to reviving sagging housing markets. And it’s true that financing availability remains tight, at least by historical standards, and isn’t going to get looser with rising rates. (more…)